Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019Feb 2015
26
There are just six weeks to go until mothers and fathers with babies due on or after 5 April 2015 can start sharing up to 50 weeks of parental leave.
285,000 working couples a year are expected to be eligible for Shared Parental Leave (SPL), with parents giving their employers 8 weeks’ notice of the pattern of leave they intend to take.
To help parents understand their rights and responsibilities, BIS and Acas have shared the following tips when considering Shared Parental Leave:
Feb 2015
24
HMRC have this week released more details on how the Marriage Allowance (previously referred to as Transferable Allowances for Married Couples and Civil Partners) will operate from April 2015. The allowance means a spouse or civil partner who does not pay tax, or does not pay tax above the basic rate of income tax, can transfer up to £1,060 of their personal tax-free allowance to a spouse or civil partner, as long as the recipient of the transfer does not pay more than the basic rate of income tax. This could represent a saving of up to £212 per year for eligible couples.
Registering for marriage allowance is simple and quick – and it is all done at www.gov.uk/marriage-allowance. There’s guidance for couples to check their eligibility for the new allowance, and registration only takes about three minutes. From April, HMRC will begin inviting those customers who have registered their interest to be among the first to apply using the new online service. Customers who choose not to register early, however, will not lose out. Instead, they will be able to make an application later in the 2015-16 tax year and still receive the full annual allowance.
To support the change, both the transferor and recipient’s tax codes will be amended. This will in turn introduce two new tax code suffixes as follows:
• M will be used for the spouse/civil partner receiving the transferred allowance
• N will be used for the spouse/civil partner transferring the allowance
These new tax suffixes will not be used on tax codes prior to April 2015, but will be used on P6 coding notices from April and, in due course, P9 and P9X uprating notices.
For more information on the above, HMRC’s announcement ‘Registration opens for new married couples tax break’ can be viewed at:
https://www.gov.uk/government/announcements?departments%5B%5D=hm-revenue-customs.
Feb 2015
23
When a company reaches its staging date, it must automatically enrol all eligible employees into a qualifying pension scheme.
If it is not ready to enrol employees at the staging date, it can defer the enrolment of all employees for up to 3 months. This may be because it has not yet registered with a pension scheme or it may be because it doesn't have the necessary systems in place to handle assessments and contributions.
An essential part of postponement is communicating with all employees within 6 weeks of the staging date, letting them know that automatic enrolment has been deferred. If the company fails to issue these communications then postponement will never have happened and auto enrolment must be applied retrospectively to the staging date.
This is important as apparently some employers are interpreting postponement as not having to do anything for a 3 month period!
BrightPay prompts the user to print these letters before proceeding beyond the staging date.
Feb 2015
16
Before your staging date you should register with a qualifying automatic enrolment pension scheme. NEST operates one of these schemes and it will probably be the most popular scheme for small and micro businesses due to two main factors:
a] It is Government backed
b] It has a legal obligation to accept all employers who wish to use it to comply with the duties, irrespective of their size
Registering with NEST is fairly straightforward and should take you no more than half an hour. If you are going for the bog standard setup with the one minimum scheme for all employees, you have no delegates and you have your bank details to hand, the setup time could be as little as 10 minutes!
The four things to note or watch out for during the setup are:
1. Name of payment source. You'll be asked to put a name on the payment source you will be using to pay contributions. You can use any name you like e.g. Bank1. The thing to watch out for here is that when you enter the NEST details into BrightPay that you use the exact same name with the same uppercase and lowercase letters. If you enter "Bank1" in the NEST registration and then enter "bank1" in BrightPay, your csv file submissions will be rejected by NEST. Both names must be identical in all respects.
2. Group name. If you are just applying the one rule for all employees, then you will only have one group. You could call this group "Group1". Again it is vital that you enter the exact same name when entering the details in BrightPay.
3. Pay periods. If you pay your staff monthly, enter the start and end date of your actual pay period and NOT the tax period. BrightPay does not use tax periods for calculating contributions or for worker assessment.
4. Contribution rates and workers' pay. Again, assuming you are going for the bog standard, your contributions rates will be the current minimum and this will be calculated on qualifying earnings. Of course it’s also possible, and just as easy, to pay contributions above the minimum levels should you wish.
If you intend to have someone else look after your automatic enrolment duties e.g your accountant, bookkeeper or payroll bureau provider, you will need their details. NEST provides a checklist of details to obtain before you register with them. This can be found here.
Once you have completed your registration with NEST you should then enter the details in BrightPay. This should take no more than 3 minutes.
BrightPay will start enrolling employees once your staging date arrives (or give you the option to postpone for up to 3 months).
Feb 2015
10
On 6th April 2015, a new tax break will come into effect which is expected to benefit four million married couples in the UK.
The new measure will allow a spouse or civil partner who is not liable to income tax above the basic rate to transfer up to £1,060 of their personal allowance to their spouse/civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate.
The transferred personal allowance will primarily benefit single earner households, where the personal allowance of a non-earning spouse was previously wasted, and will act as a tax reducer for the recipient with a reduction in income tax of up to £212.
Married couples or civil partnerships who are eligible to claim the Married Couples Allowance i.e. at least one of the spouses or civil partners was born before April 6, 1935, however, will not be able to make a transfer.
Additionally, it will not be available to non-UK domiciled individuals who elect to pay tax on the remittance basis of taxation or non-UK residents who would be higher or additional rate taxpayers if their worldwide income was within the scope of UK tax.
A simple online eligibility checker and initial registration process is due soon from the HMRC.
Feb 2015
9
From April mothers will be allowed to share up to 50 weeks of their maternity leave and 37 weeks of their pay.
However, TUC analysis published shows that 40% of working dads with a child under the age of one would be ineligible because their partner is not in paid work. Mothers who are not employed or self employed do not have a right to share maternity leave or pay.
The TUC says that it welcomes SPL, but is concerned the scheme will have a limited impact because of the rules around eligibility and low statutory pay.
According to government projections, as few as 5,700 men are expected to apply for shared parental leave over the next 12 months. However, it estimates that shared parental leave would be open to around 200,000 more fathers each year if their rights to take it were not dependant on the mother being in work.
Half of new dads in the UK do not take their full two weeks’ statutory paternity leave – a rate that rises to three-quarters of fathers on the lowest incomes. The TUC says that without better rights to leave and pay, many men will continue to miss out on playing an active role in the first year of their child’s life.
Feb 2015
4
Do all nannies need to be automatically enrolled?
Most do; nannies who are aged between 22 and the State Pension Age and earn above the Tax Free Allowance (currently £10,000) will need to be automatically enrolled..
A nanny who does not qualify to be automatically enrolled still has the right to ask to join a workplace pension.
My nanny is part time - will I have to set up a pension for her?
Yes – even though your nanny might not need to be enrolled she has the legal right to join a pension. That means that you need to have a pension in place for her to join.
What if my nanny doesn't want a pension? Do I still have to enrol her?
If your nanny qualifies for automatic enrolment, you are legally obliged to enrol her. However, your nanny can always opt out of the pension scheme once they’ve been enrolled if they don’t want to take part.
When will automatic enrolment affect nanny employers?
Automatic enrolment is being introduced gradually. The day the new legislation applies to you is called your Staging Date and will be between now and October 2017.
Feb 2015
2
More than 160 employers were issued with fixed penalties of £400 last year after The Pensions Regulator (TPR) ramped up the use of its powers for auto-enrolment failures.
166 businesses were issued with fines in the last quarter of last year, compared to only three firms receiving penalties in the previous nine months. This increase coincided with a bulge in the number of medium-sized firms obliged to complete auto-enrolment last year.
There was also a surge in the number of compliance notices issued in the final quarter at 1,139, compared to 163 between July and September 2014. Employers are obliged to a submit a formal document, known as a declaration of compliance, to the regulator within five months of the firm's start date for the auto enrolment process.
The Pensions Regulator spokesman, Charles Counsell, has made it clear that it expects more firms to be fined as the enrolment process gathers momentum. "The number of employers approaching the date when they must confirm that they have complied with new workplace pensions duties (known as a declaration of compliance) is now beginning to rise significantly," he said. "With the mass market roll out of automatic enrolment to large numbers of small businesses in the coming months, we expect to see an increase in how often we need to use our powers."
The main reason for not signing up employees to a pension scheme on time seems to be that some employers have just not given themselves enough time to prepare. The regulator recommends that firms start planning at least a year before their staging date for beginning their auto-enrolment process.
Jan 2015
27
Correcting Payroll Errors using Full Payment Submission (FPS)
If a mistake has been made with an employee’s pay or deductions it can corrected by using your next Full Payment Submission (FPS) to update your year-to-date figures.
Correcting Payroll Errors using an Additional Full Payment Submission (FPS)
An additional FPS can also be sent to correct year-to-date figures providing it is sent before your next FPS is due. In the case of an additional FPS the same pay date should be used.
If an employee has been underpaid you can either send an additional FPS, on or before you pay your employee the additional amount or by the 19th of the tax month after you sent your original FPS. HMRC will include the correction in that month’s PAYE bill.
Correcting errors in an employee’s National Insurance deductions
Both FPS’s and additional FPS’s can be used to correct mistakes to National Insurance deductions.
If an employee has underpaid their national insurance in a particular month, only the equivalent of their following month’s national insurance liability can be taken from them the following month. The remainder must be recovered in another month. Pay any underpayment to HMRC straight away.
Example: Your employee underpaid by €80 in January. In February the employee’s national insurance is €60. This means you can only recover up to €60 towards their underpayment that month. The remainder will need to be recovered the following month.
If the underpayment was in a previous tax year
An Earlier Year Update (EYU) should be sent to HMRC stating the difference between what you originally deducted and the correct amount. The EYU will inform HMRC if you’ve deducted or repaid the difference to the employee. Once more if you have deducted too little you can’t recover more than the National Insurance due that month.
Correcting an employee’s student loan repayments
Both FPS’s and additional FPS’s can be used to correct mistakes once the difference has been repaid or deducted to the employee. Once more if you have deducted too little you can’t recover more than the student loan deductions due that month.
If the mistake was in a previous tax year
If you have deducted too little you do not need to do anything. The employee can contact the Student Loans Company to see how it affects them. If you have deducted too much refund your employee and you can correct your year-to-date figures using an FPS on or before 19th April otherwise use an EYU.
Jan 2015
23
The Pensions Regulator will be issuing a one-off letter to all small and micro employers between the end of January and May 2015 to ensure they know when their new workplace pension duties start.
The letter will provide key information such as their PAYE reference number, the date the law applies to them and the process through which they can provide a nominated contact to the regulator to receive regular, useful and relevant information in the run up to the date at which they need to comply with their duties.
Approximately five million workers have already been automatically enrolled by nearly 43,000 employers. In the coming months and years, another 4 million workers will be automatically enrolled by small employers across the country. Small employers are those with fewer than 50 workers.
You can find out your staging date at any time by simply entering your PAYE reference into the Pension Regulator’s staging date calculator.
Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019